As a result of growing concerns over the role of hedge funds in Puerto Rico’s financial crisis, U.S. Representative Nydia Velázquez is targeting the funds through a proposed bill that would require them to release more information about their activities to the U.S. Securities and Exchange Commission.

As a result of the island’s ongoing financial crisis, bonds have been trading for low prices, and hedge funds have reportedly been buying them up, now accounting for an estimated $25 billion of Puerto Rico’s total debt, according to a recent article from Bloomberg Business.

Through the proposed bill, H.R. 3921, also referred to as the Hedge Fund Sunshine Act, such firms would be required to file with the S.E.C. when they purchase ownership of more than 1 percent of a class of equity securities, down from the current 5 percent threshold. The bill would also apply to debt and derivatives, and require funds to release quarterly reports detailing their debt and equity securities.

In February of this year, local regulators closed Puerto Rico-based Doral Bank, which held $5.9 billion in assets, due to a glut of nonperforming loans held by Doral.

The bank began to experience problems in 2006, after its investors, which included Goldman Sachs and Bear Stearns Merchant Banking, attempted a $610 million recapitalization of the bank. The destabilization attempt failed, and Doral’s 2015 closure marked the largest bank failure in the U.S. since 2010.

With a growing concern that hedge funds are buying up significant amounts of Puerto Rico’s debt, Ms. Velázquez—a Democrat who serves New York’s 7th Congressional District and was born in the commonwealth—has argued that by requiring more documentation with a lower investment threshold, the S.E.C. and public will have a greater understanding of the financial holdings of the funds.

“It has become increasingly clear that hedge funds, which have purchased a sizable part of Puerto Rico’s debt, are exacerbating the crisis and profiting from the island’s misery,” the congresswoman said in a press release issued on Nov. 4. “This bill will allow regulators and the public to see exactly what role these funds are playing in Puerto Rico’s financial crisis and in our broader economy.”

The $3 trillion hedge fund industry is allowed to operate “in the shadows,” Ms. Velázquez stated, and because of their debt holdings, she noted that the funds are lobbying for spending cuts and pushing against legislation that would allow some agencies to file for bankruptcy.

“From the auto manufacturers to Puerto Rico, we’ve seen time and again that hedge funds often prey on and profit from financially distressed entities,” she said. “By giving the public and regulators a better sense of hedge funds’ activities, we can finally begin holding this secretive industry accountable for its actions.”